Student assignment: Strategic marketing plan and action planning report for XXX (2013-2015)

This Assignment Is Published With Permission From The Author For Online Review Only
All Rights Reserved @ ChinaAbout.Net

Executive summary

 

This assignment involves a marketing plan for XXX, a furniture brand in China. There are three major part of this study: 1) Introduction of the company background and also the overall marketing goals of the company; 2) Examination of the marketing goals in 4Ps; 3) Timeline for marketing plan for the company followed by concluding remarks.

Content page

Executive summary………………………………………………………………………………………….. 1

Strategic marketing plan and action planning report for XXX (2013-2015)…………….. 3

  1. Introduction……………………………………………………………………………………………… 3

1.1      Background of the company……………………………………………………………… 3

1.2      Overall marketing goals for XXX………………………………………………………. 3

  1. Key marketing goals – 4Ps………………………………………………………………………….. 4

2.1      Product mix…………………………………………………………………………………….. 4

2.1.1     Premium product position by targeting at the high-end market…….. 5

2.1.2     Reduce the OEM product and service provision…………………………. 5

2.1.3     Increase the product line width and depth…………………………………. 6

2.1.4     Excellent product quality and packaging……………………………………. 6

2.2      Price mix…………………………………………………………………………………………. 6

2.3      Place mix………………………………………………………………………………………… 7

2.4      Promotion mix…………………………………………………………………………………. 8

  1. Marketing strategies…………………………………………………………………………………… 9

3.1      Position the company by using Porter’s five forces analysis…………………… 9

3.2      Market segmentation and positioning……………………………………………….. 10

3.3      Strategic partnership with design firms and major forwarders……………… 10

3.4      Ambitious advertising strategy to increase the brand awareness…………… 11

  1. Budgeting and action plan for 2013 – 2015 financial year…………………………….. 11
  2. Conclusion……………………………………………………………………………………………… 14

List of Reference…………………………………………………………………………………………… 15

Bibliography………………………………………………………………………………………………….. 17

 

List of figure

 

Figure 1 Porter’s five forces analysis model…………………………………………………. 9

 

List of tables

 

Table 1 Marketing plan and timeline for 2013  …………………………………………. 13

Table 2 Marketing plan and timeline for 2014  …………………………………………. 14

Table 3 Marketing plan and timeline for 2015…………………………………………….. 15

 

 

 

Strategic marketing plan and action planning report for XXX[1] (2013-2015)

1.        Introduction

 

1.1    Background of the company

 

XXX International Enterprises Limited is a private   limited   company    incorporated in Hong Kong mainly trading wooden products, furniture, decorative panels, metal parts, speaker cabinets & etc (XXX.com.hk 2012). Starting from trading business by focusing on the sourcing China for the western buyers in the furniture sector in the hospitality industry, the company is now undergoing a strategic change by building up its own furniture factory in the South China’s Guangdong Province together with its own brand, i.e. XXX. And therefore, the company is in urgent need of utilizing marketing tools and strategies to help it establish and continue the company as a famous furniture brand in China and also across the world.

 

1.2    Overall marketing goals for XXX

 

According to Charles W. Lamb, Joseph F. Hair and Carl McDaniel (2009, p. 39), a marketing goal is a statement of what is to be completed via marketing activities. And to be practical and useful, these objectives should meet some criteria such as “being realistic”, “being time-specific”, and “comparable to benchmark”. As for XXX International Enterprises Limited, the company has set the long term three year marketing goals as following: –

 

a)      The company is anticipating to sustain an annual 35 % total revenue growth during 2013 – 2015 financial years;

b)      The company is targeting to increase the brand awareness in China from the current 2 % to 15 % within the 2013 – 2015 financial years;

c)      The company is targeting to reduce the cost of business such as production, management and marketing in contrast of the total revenue from the current 38 % to below 30 % within the 2013 – 2015 financial years which is expected keep the company in absolute advantage compared to the major domestic competitors in term of cost and operation efficiency.

 

2.        Key marketing goals – 4Ps

 

The marketing mix is most widely known as E. Jerome McCarthy’s (1960) ‘4Ps’: Place, Product, Price and Promotion. In this section, we will analyze how the 4Ps could be applied to express the overall marketing goals of the XXX International Enterprises Limited and assist the achieving of these goals in a practical and reasonable way.

 

2.1    Product mix

 

Product refers to anything that is capable of or can be offered to satisfy a need or want. The concept of product involves not only the visible product but also the intangible services (Dogra 2008, p. 80). In another word, to put this concept in a more exact manner, product mix refers to the total array of products that a company markets and consists of new, growing, mature, and declining products and also the product decisions that are coming together with a particular product (blackwellreference.com 2012).

 

There are several product decisions that could be summarized from the company current and future business strategies and vision: –

 

2.1.1            Premium product position by targeting at the high-end market

 

As the company is at the turning point of its business, in the coming three financial years, the company would be in an obvious swift of positioning from the current middle end market to the desired high end market in the furniture market. And therefore, the first product decision would be to position the company and marketing goals as targeting at providing the premium product for the high-end market because only the high-end customers and buyers would pay extra for the excellent product quality and pay more attention for the quality of the products. And also setting the position of the products would from the very beginning pay the key base for the making of other key marketing decisions.

 

2.1.2            Reduce the OEM product and service provision

 

Another product strategy is regarding the proportion of OEM products and non-OEM product and services. OEM (Original Equipment Manufactuer) refers to suppliers making certain products according to the designs and specifications and with equipment from generally multinational corporations as buyers (Herkenrath 2007, p. 106). In another word, in generally, dealers of OEM products add something of value before reselling the merchandise. A vendor that does this is known as a Value Added Reseller (VAR). A VAR might build components, sub-systems, or systems from parts made by other manufacturers (wisegeek.com 2012). As mentioned above earlier, The company is targeting to increase the brand awareness in China from the current 2 % to 15 % within the 2013 – 2015 financial years, it would reasonable for the company to adjust the proportion of OEM products and non-OEM product and services and increase the non-OEM product provision, i.e. the company’s own brand should be use more frequently by adopting the company’s brand in the business.

 

2.1.3            Increase the product line width and depth

 

Product width refers to the number of product lines sold by one company, or the different types of products the company carries while the product line depth refers to different modifications of a product (Grayson 2006, p. 112). The company is targeting at increasing both the product line width and depth for two major reasons: on one hand, the product line width increasing would be necessary demonstrate the company’s brand to different users in the furniture market by providing more types of furniture; and on the other hand, the company is also targeting at expanding the product line depth which is necessary if the company would want to be more specialized in certain key products provision.

 

2.1.4            Excellent product quality and packaging

 

As mentioned above earlier, in the coming three financial years, the company would be in an obvious swift of positioning from the current middle end market to the desired high end market in the furniture market, another product strategy and decision in relation to this market positioning policy is to provide excellent product quality as well as good packaging. And in detail, more specialized standards could be adopted to make sure that not only the company is producing goods under its name but also the quality of these products should be finest and helps the company beat other competitors.

 

2.2    Price mix

 

Another P refers to price in the 4Ps marketing mix. In definition, price mix is the value of the product determined by the procedures. It includes decisions regarding the price level to be adopted, discount to be offered and terms of credit to be allowed to customers (Tulsian, P. C. & Tulsian, S. D. 2002). As said before, XXX International Enterprises Limited would be targeting at the high end market of the furniture industry in the coming three financial years and therefore the price level would be high compared to other furniture. But this does not necessarily mean that under the same level of product quality and service, the company charges more than the competitors, and instead, the competitive advantage of the company in term of pricing is just coming from price less with the same product provision. In another word, while the product quality is guaranteed the company needs to price less than the major competitors in order to obtain the orders in the market. Therefore, there are two major pricing strategies to be adopted in different products. In the products that share high level of standardization which means that little differences could be found between different suppliers in term of product quality, safety and other necessary features, competitive pricing could be use which generally is where firms must be able to offer the best price in the market and meet price erosion without compromising quality (ventureline.com 2012). And another price strategy is premium pricing for the highly customized or differentiated product which could not be easily matched by the major competitors. Premium pricing is the practice of setting a price higher than the market price, in the expectation that customers will purchase it anyway because of certain reasons (accountingtools.com 2012). And obviously, when XXX could provide products that are not comparable by other competitors easily, charging more or premium would assist the company to achieve its overall objective which is anticipating to sustain an annual 35 % total revenue growth during 2013 – 2015 financial years.

 

2.3    Place mix

 

A third marketing mix is the place mix which is sometimes referred as distribution decisions / mix. Here some place decisions need to be made. First of all, regarding the distribution channel, we will use distribution centers that are located in different provinces to deliver the furniture in the domestic market; secondly, regarding the transportation tools, both sea shipment and air shipment could be adopted according to the different lead time required. Thirdly, regarding the warehousing decision, with the anticipated fast growth of the company’s business, expanding the current warehouses in China would be very necessary to cope with the future larger need of warehousing.

 

2.4    Promotion mix

 

d)     In the context of marketing mix, promotion represents the various aspect of the marketing communication, which is the communication of information about the product with the objective of creating a positive customer response (netmba.com 2012). There are various kinds of traditional promotion mix that could be adopted for the company to express and communicate its information of the product to the customers. First of all, media releases are a great way to get information about the product, service or company out to a large amount of potential customers. If a company can put information about the product into an interesting story then there is a chance the story will be picked up (promosales.com.au 2012). The media not only would help expand the customer base but also help achieve one of the set overall marketing targets which is to increase the brand awareness in China from the current 2 % to 15 % within the 2013 – 2015 financial years. Secondly, another strategy that could be used is to advertisement on the major TV channels, new paper and also the internet such as the social websites which receives more and more popularity. Thirdly, promotion products could also be adopted in which products could be promoted in certain events or discount activities to attract more customer attentions. But the final target of using these promotion tools would be to increase the brand exposure and brand awareness among the potential customers.

3.        Marketing strategies

 

 

3.1    Position the company by using Porter’s five forces analysis

 

 

Figure 1 Porter’s five forces analysis model

Source: Lewis, Goodman, Fandt & Michlitsch 2007

 

The first step of planning the marketing strategy must be trying to know the current status and situation of the company in the market and understanding the market competition level is critical. One of the most methods in help a company to develop such understanding is though the adoption of Porter’s five forces analysis model. As shown in the above figure, there are five forces influencing the overall level of competition of the industry / market. It is recommended that the company do further studies and researches to ensure that the company knows very clear how competitive the market is and how some threats such as the threat of substitutes could be avoided and even utilized, and no doubt that the company would be encouraged to maximize the current strengths found.

 

3.2    Market segmentation and positioning

 

Market segmentation and positioning is another method that helps the company to better understanding the market that is meant to be focused by the company because it is believed that focusing on all fields (e.g. higher end market, middle end market and lower end market) could usually mean business failure because focusing on a specific field would mean specialization and more professionalism to some extent. By segmenting the market and picking up some segments to be focused, the company is expected to better carry out the overall business strategy which is to focusing on the higher end market, because such concept is not really fully defined in the industry. The company needs to have its own concept defined regarding what product or who should be considered into higher end market.

 

3.3    Strategic partnership with design firms and major forwarders

 

A strategic partnership means that the manufacturer and other market players, e.g. retailer, create shared long-term business goals collaboratively and develop business operations together (Finne & Sivonen 2009). By building up strategy partnership with other major players, there are advantages though disadvantage as well. In the situation of the Kindwood, it could set up strategic partnership with design firms and major forwarders for three major reasons: a) first of all, by creating strategic partnership with the design firm, it is expected that the company could expand the customer base through the design firm which tend to have frequent business relationship with the customers in the higher end market of the furniture industry and from these design firm, the company would be able to expedite its plan in business sale growth; b) secondly, by building up strategic business relationship with the design firm, it is anticipated that the orders would be more stable and thus fluctuation of sale could be largely control though not eliminated because of the nature of the business; c) thirdly, by creating strategic business relationship with the major forwarders such as Shunfeng, it is expected that not only the quality of delivery would be improved but also the cost should be able to be controlled and cut to some extent because the company now has more bargaining power with the strategic partnership built.

 

3.4    Ambitious advertising strategy to increase the brand awareness

 

Ambitious advertising strategy to increase the brand awareness would be very necessary not only because the company has set such a target in the coming three financial years but also the company needs such powerful and large investment in the advertising to boom the brand and increase the market exposure of the company’s own brand in the market as a higher end choice of furniture to both residential and business buyers.

 

4.        Budgeting and action plan for 2013 – 2015 financial year

 

Million Yuan

 

Events\Month 1 2 2 4 5 6 7 8 9 10 11 12 Budgeting
Marketing studies and customer behavior studies * * * * * * 24
Promotional events * * * * * * * * * 144
Advertisement * * * * * * * * * * 384
Media management * * * * * * 28.8
Education and coaching of sale staffs * * * * * * * * * 48
Place channel development * * * * * * * * 33.6
Warehousing expansion * * * * * * * * * 72
Review of the effectiveness of the marketing plan * * * * * * 19.2
In Sum 753.6

Table 1 Marketing plan and timeline for 2013

Million Yuan

 

Events \Month 1 2 2 4 5 6 7 8 9 10 11 12 Budgeting
Marketing studies and customer behavior studies * * * * * * 31.2
Promotional events * * * * * * * * * 187.2
Advertisement * * * * * * * * * * 499.2
Media management * * * * * * 37.44
Education and coaching of sale staffs * * * * * * * * * 62.4
Place channel development * * * * * * * * 43.68
Warehousing expansion * * * * * * * * * 93.6
Review of the effectiveness of the marketing plan * * * * * * 24.96
In Sum 979.68

Table 2 Marketing plan and timeline for 2014

Million Yuan

 

Events \Month 1 2 2 4 5 6 7 8 9 10 11 12 Budgeting
Marketing studies and customer behavior studies * * * * * * 40.56
Promotional events * * * * * * * * * 243.36
Advertisement * * * * * * * * * * 648.96
Media management * * * * * * 48.672
Education and coaching of sale staffs * * * * * * * * * 81.12
Place channel development * * * * * * * * 56.784
Warehousing expansion * * * * * * * * * 121.68
Review of the effectiveness of the marketing plan * * * * * * 32.448
In sum 1273.584

Table 3 Marketing plan and timeline for 2015

5.        Conclusion

 

Though the marketing plan has been made for the coming three financial years, but there could be contingences that need to be taken into consideration timely, such as the market condition change and the customer behaviors changes. Therefore the timeline for the marketing plan should be subject to regular review as well as subject to change if necessary. And also the marketing goals should be divided into smaller and practical goals to be achieved. And also regular checking should include inspect of the realization of these goals and report should be made to the higher management of the company.

 

 

List of Reference

 

accountingtools.com 2012. Premium Pricing – AccountingTools. Accessed on 23 Oct 2012 [online]: http://www.accountingtools.com/premium-pricing/

 

blackwellreference.com 2012. product mix. Accessed on 23 Oct 2012 [online]: http://www.blackwellreference.com/public/tocnode?id=g9780631233176_chunk_g978140510254419_ss1-48

 

Dogra, B. 2008, Rural Marketing. New Delhi: Tata McGraw-Hill. p. 80

 

Finne, S. & Sivonen, H. 2009. The Retail Value Chain: How to Gain Competitive Advantage through Efficient Consumer Reponses (ECR) strategies. London: Kogan Page Publishers

 

Grayson, F. N. 2006, CliffsTestPrep Foreign Service Officer Exam: Preparation for the Written Exam and the Oral Assessment. New Jersey: John Wiley and Sons. p. 112

 

Herkenrath, M. 2007, The Regional and Local Shaping of World Society. Berlin: LIT Verlag Münster, p. 106

 

XXX.com.hk 2012. Company Brief. Accessed on 23 Oct 2012 [online]: http://www.XXX.com.hk/aboutus.asp

 

Johnson, G., Scholes, K. & Whittington, R. 2006. Exploring Corporae Strategy: Text and cases, 7 edition, New Jersey: Prentice Hall

 

Lewis, P. S., Goodman, S. H., Fandt, P. M. & Michlitsch, J. F. 2007. Management: challenges for tomorrow’s leaders. Mason, OH: Thomson Higher Education.

 

Lockström, M. 2007, Low-Cost Country Sourcing. Wiesbaden: Deutscher University Verlag. p. 101

 

 

Lamb, C. W., Hair, J. F. & McDaniel, C. 2009, Essentials of Marketing. Mason: South-Western, Cengage Learning. p. 39

 

McCarthy, E. J. 1960 e-Retailing. Homewook IL: Irwin

 

netmba.com 2012. The marketing mix (The 4 P’s of marketing.). Accessed on 23 Oct 2012 [online]: http://www.netmba.com/marketing/mix/

 

promosales.com.au 2012. Promotional Strategies. Accessed on 23 Oct 2012 [online]: http://www.promosales.com.au/promotional-strategies.html

 

Tulsian, P. C. & Tulsian, S. D. 2002. Comm. Studies & Application 10. Agra: Ratna Sagar

 

ventureline.com 2012. COMPETITIVE PRICING Definition. Accessed on 23 Oct 2012 [online]: http://www.ventureline.com/accounting-glossary/C/competitive-pricing-definition/

 

wisegeek.com 2012. What is OEM? Accessed on 23 Oct 2012 [online]: http://www.wisegeek.com/what-is-oem.htm

 

 

 

Bibliography

 

Barowski, M. 2000. Online Marketing, Berlin: Cornelsen.

 

Chaffey, D. 2004. E-Business and E-Commerce with One key Course compass Access Card: Chaffey, E-Business and E-Commerce Management. 1e Boston, United States: Pearson Custom Publications.

 

Menne, P. 2008, Potential of Geo-Marketing-Tools for the Development of Advanced Online business model. Germany: GRIN. p. 37

 

Mrketingminefield.co.uk 2010. PESTLE Analysis. [online] URL:  http://www.marketingminefield.co.uk/pestle-analysis/

 

 

[1] XXX   International   Enterprises  Limited